Chapter 3 Fin A C C

CHAPTER 3 - RECEIVABLES
3-1.
a. Accounts Receivable
b. Receivables from Employees (part of non-trade receivables) – current assets
c. Advances to Suppliers – Current assets or deduction from Accounts Payable to the same
supplier
d. Accounts Receivable
e. Customers’ Accounts with Credit Balances – Current Liabilities
f. Cost of merchandise must be included in inventories
g. Accounts Receivable
h. Subscriptions Receivable – current asset if collectible within 12 months; otherwise, non-
current asset or deduction from Shareholders’ Equity
i. Other Non-Trade Receivables – Current asset or non-current asset depending on terms of
payment
j. Advances to Suppliers – Current Assets
k. Suppliers’ Accounts with Debit Balances or Advances to Suppliers – Current assets
l. Accounts Receivable
m. Claims for Income Tax Refund – Current Assets
n. Accounts Receivable, amount of loan presented separately as part of liabilities
o. Accounts Receivable
p. Not recognized anymore (for write off)
3-2. (Ginoo Company)
Gross Method
Dec. 9 Accounts Receivable-First Lady 68,400
Sales 68,400
80,000 x 90% x 95%
10 Accounts Receivable-Men’s World 50,000

Sales 50,000
19 Cash 67,032
Sales Discounts 1,368
Accounts Receivable-First Lady 68,400
26 Accounts Receivable-Teens’ Kingdom 40,000

Sales 40,000
31 Sales Discounts 800

Allowance for Sales Discounts 800
2014
Jan. 5 Cash 39,200
Allowance for Sales Discounts 800
Accounts Receivable-Teens’ Kingdom 40,000
9 Cash 50,000
Accounts Receivable-Men’s World 50,000
Net Method
Sales 67,032
68,400 x .0.98

Sales 49,000
19 Cash 67,032
Chapter 3 – Receivables
Dec. 26 Accounts Receivable-Teens’ Kingdom 39,200

Sales 39,200

Sales Discount Forfeited 1,000
2014
Jan. 5 Cash 39,200
Accounts Receivable – Teens’ Kingdom 39,200
9 Cash 50,000
Allowance Method
Allowance for Sales Discount 1,368
Sales 67,032

Sales 49,000
Dec. 19 Cash 67,032

26 Accounts Receivable-Teens’ Kingdom 40,000

Allowance for Sales Discount 800
Sales 39,200
31 Allowance for Sales Discount 1,000

Sales Discount Forfeited 1,000
2014
Jan. 5 Cash 39,200
Allowance for Sales Discount 800
Accounts Receivable-Teens’ Kingdom 40,000
9 Cash 50,000
3-3. (Colleco Supermarket)

June 1- Accounts Receivable – Citibank 2,450,000
30 Cash 1,764,000
Accounts Receivable – Metrobank 1,470,000
Credit Card Service Charges 116,000
Sales 5,800,000
Cash 3,234,000
Accounts Receivable - Citibank 2,156,000
Accounts Receivable - Metrobank 1,078,000
3-4. (Colayco Company)

(1)
July 14 Allowance for Doubtful Accounts 10,000
Accounts Receivable-Moret Co. 10,000
31 Notes Receivable 12,000

Sales 12,000
13
Aug. 15 Cash 20,000

Notes Receivable 15,000
Sales 35,000
Nov. 1 Cash 19,200

Credit Card Service Charge 800
Sales 20,000
4% x 20,000 = 800
Nov. 4 Accounts Receivable-P. Noval 12,300

Interest Revenue 300
12,000 x .10 x 90/360 = 300
5 Accounts Receivable-Credit Card 9,000

Sales 9,000
Nov. 9 Cash 8,550

Credit Card Service Charge 450
Accounts Receivable-Credit Card 9,000
5% x 9,000 = 450
Nov. 15 Accounts Receivable-Moret Co. 10,000

Allowance for Bad Debts 10,000
15 Cash 10,000
Accounts Receivable-Moret Co. 10,000
Dec. 13 Cash 15,600

15,000 x 12% x 120/360 = 600
3-5. (Format Company)
a. Carrying value of the note on January 1, 2013

P6,000,000 x 0.6575 P3,945,000
Prevailing interest rate 15%
Interest revenue for 2013 P 591,750
b. Carrying value, January 1, 2013 P3,945,000

Add amortization of discount during 2013 591,750
Carrying value, December 31, 2013 P4,536,750
(or simply P3,945,000 x 1.15 = P4,536,750)
3-6. (Formatted Company)
a. Carrying value of the note on January 1, 2013 (P2 M x 2.2832) P4,566,400

Interest rate 15%
Carrying value, December 31, 2013

4,566,400 + 684,960 – 2,000,000 P3,251,360
Interest rate 15%
b. Carrying value, January 1, 2013 P4,566,400

Add amortization of discount during 2012 684,960
Less first payment of principal (2,000,000)
Carrying value, December 31, 2012 P3,251,360
14
3-7. (HRV Company)

(a) September 30, 2014 (1,000,000)+(3,000,000 x 12%) P1,360,000
September 30, 2015 (1,000,000)+(2,000,000 x 12%) P1,240,000
September 30, 2016 (1,000,000)+(1,000,000 x 12%) P1,120,000
(b) January 1 – September 30, 2014 (260,000 x 9/12) P 270,000

October 1 – December 31, 2014 (240,000 x 3/12) 60,000
Total interest revenue for 2014 P 330,000
(c) As of December 31, 2013 Current Non-current

Notes receivable P1,000,000 P2,000,000
Interest receivable (360,000 x 3/12) 90,000
3- 8. (Pinky Pop Company)

The note is interest-bearing, but the rate of interest of the note (5%) is unreasonably lower than
the prevailing rate (10%) for similar obligation. The present value of the note is determined as
follows:
2.5 M + (5% x 7.5 M) 2,875,000 x 0.9091 P2,613,663
2.5 M + (5% x 5.0 M) = 2,750,000 x 0.8264 2,272,600
2.5 M + (5% x 2.5 M) = 2,625,000 x 0.7513 1,972,163
Total P6,858,426
or 2.5 M x 2.4869 P6,217,250
(5% x 7.5 M) x 0.9091 340,913
(5% x 5.0 M) x 0.8264 206,600
(5% x 2.5 M) x 0.7513 93,913
Total P6,858,676
(a) Amortization Table

Payment of Interest Interest Amortization Carrying
Date Principal Paid Revenue of Discount Value
01/01/13 6,858,426
12/31/13 2,500,000 375,000 685,843 310,843 4,669,269
12/31/14 2,500,000 250,000 466,927 216,927 2,386,196
12/31/15 2,500,000 125,000 238,804* 113,804* ------------
*difference is due to rounding off
(b) Journal entries

2013
Jan. 1 Notes Receivable 7,500,000
Discount on Notes Receivable 641,574
Gain on Sale of Land 858,426
Land 6,000,000
7,500,000 – 6,858,426 = 641,574 Discount
6,858,426 – 6,000,000 = 858,426 Gain
Dec. 31 Cash 2,875,000
Interest Revenue 685,843
Notes Receivable 2,500,000
2014
Dec. 31 Cash 2,750,000
2015
Dec. 31 Cash 2,625,000
15
3-9. Pinky Pip Company
The note is interest-bearing, but the rate of interest of the note (14%) is unreasonably higher than
the prevailing rate (10%) for similar obligation. The present value of the note is determined as
follows:
2.5 M + (14% x 7.5 M) = 3,550,000 x 0.9091 P3,227,305
2.5 M + (14% x 5.0 M) = 3,200,000 x 0.8264 2,644,480
2.5 M + (14% x 2.5 M) = 2,850,000 x 0.7513 2,141,205
Total P8,012,990
or 2.5 M x 2.48685 P6,217,125

(14% x 7.5 M) x 0.9091 954,555
(14% x 5.0 M) x 0.8264 578,480
(14% x 2.5 M) x 0.7513 262,955
Total P8,013,115*
*Difference in the computation is due to rounding off of present values
a. Amortization Table
Payment of Interest Interest Amortization Carrying
Date Principal Paid Revenue of Premium Value
01/01/13 8,012,990
12/31/13 2,500,000 1,050,000 801,299 248,701 5,264,289
12/31/14 2,500,000 700,000 526,429 173,571 2,590,718
12/31/15 2,500,000 350,000 259,282* 90,718* ------------
*Difference is due to rounding off
b. Journal entries
2013
Jan. 1 Notes Receivable 7,500,000
Premium on Notes Receivable 512,990
Gain on Sale of Land 2,012,990
Land 6,000,000
8,012,990 – 7,500,000 = 512,990 Premium
8,247,955 – 6,000,000 = 2,247,955 Gain
Dec. 31 Cash 3,550,000

2014
Dec. 31 Cash 3,200,000
2015
Dec. 31 Cash 2,850,000
16
3-10. (Word Company)

Uncollectible Accounts Expense P52,000
Allowance for Uncollectible Accounts 50,000
Required balance in allowance account:

(2% x 500,000) + (10% x 200,000) + (20% x 100,000) P50,000
Reported balance in allowance before adjustments (debit) 2,000
Required adjustment charged to uncollectible accounts expense P52,000
3-11. (Edit Company)
Allowance for Uncollectible Accounts, beg P 6,000

Recovery of accounts previously written off 3,000
Uncollectible accounts expense for 2013 48,000
Allowance for Uncollectible Accounts, end (12,000)
Accounts written off during 2013 P45,000
3-12. (Toyota Products, Inc.)
a. Accounts receivable 4,800,000

Sales 4,800,000
b. Cash 3,920,000
Sales discounts 80,000
Accounts receivable 4,000,000
c. Allowance for uncollectible accounts 20,000

Accounts receivable 20,000
d. Accounts receivable 5,000

Allowance for uncollectible accounts 5,000
Cash 5,000
e. Notes receivable 25,000

f. Cash 400,000
Notes payable-bank 400,000
Cash 150,000
Notes payable-bank 150,000

Cash 150,000
g. Uncollectible Accounts Expense 65,000

9,000 – 20,000 + 5,000 = 6,000 debit
59,000 + 6,000 = 65,000
h. Interest receivable 250

Interest revenue 250
25,000 x 12% x 30/360
Accounts receivable
(450,000+4,800,000–4,000,000–20,000–25,000–150,000) P1,055,000
Less Allowance for uncollectible accounts 59,000
Amortized cost of accounts receivable P 996,000
17
3-13. (Rav, Inc.)
Accounts Receivable, December 31, 2012 P 337,000

Sales on account during 2013 1,500,000
Cash received from customers (1,600,000)
Cash discounts allowed: (882,000 ÷ 98%) x 2% P18,000
(495,000 ÷ 99%) x 1% 5,000 (23,000)
Recovery of accounts written off 3,000
Accounts written off as worthless (11,000)
Credit memoranda for sales returns (6,000)
Accounts Receivable, December 31, 2013 P 200,000
Allowance for Uncollectible Accounts, December 31, 2012 P 12,000

Recovery of accounts written off 3,000
Accounts written off as worthless (11,000)
Impairment loss on receivables 15,000
Allowance for Uncollectible Accounts, December 31, 2013 P 19,000
The computation may also be conveniently done through T-accounts, as follows:

Accounts Receivable
Balance, beg 337,000 Collections 1,600,000
Sales on account 1,500,000 Cash discounts 23,000
Recovery 3,000 Write off 11,000
Sales returns 6,000
Total 1,840,000 Total 1,640,000
Balance, end 200,000
Allowance for Uncollectible Accounts

Write off 11,000 Balance, beg 12,000
Recovery 3,000
Impairment 15,000
Total 11,000 Total 30,000
Balance, end 19,000
3-14. (Revo Company)
Allowance for Uncollectible Accounts, January 1, 2013 P 34,000

Accounts written off (47,000)
Additional accounts written off (6,000)
Allowance for Uncollectible Accounts, December 31, 2012
before adjustments (debit balance) (P12,000)
Required balance in Allowance account based on aging:
(5% x 240,000) + (25% x 20,000) + (50% x 30,000) + (90% x 24,000) 53,600
Required adjustment/Uncollectible Accounts Expense for 2013 P65,600
Accounts Receivable, December 31, 2013 P654,000

Less Allowance for Uncollectible Accounts 53,600
Net amortized cost P600,400
3-15. (Adventure Company)
a. Required/Adjusted balance of Allowance for Uncollectible Accounts:

20% x 600,000 past due accounts P 120,000
5% x 1,400,000 current accounts 70,000
Total P 190,000
18
Accounts Receivable, December 31 P 2,000,000

Past due accounts 600,000
Current accounts/Not yet past due P 1,400,000
Accounts Receivable, January 1 P 1,200,000

Sales during 2012 10,000,000
Cash collected from customers (8,720,000)
Note received in settlement of an account ( 400,000)
Accounts written off as worthless ( 100,000)
Accounts Receivable, December 31 P 2,000,000
b. Adjusted Allowance for Uncollectible Accounts, end P190,000

Accounts written off during the year as worthless 100,000
Recovery of accounts previously written off (20,000)
Allowance for Uncollectible Accounts, beg (60,000)
Uncollectible Accounts Expense for year 2013 P210,000
c. Accounts Receivable P2,000,000

Less Allowance for Uncollectible Accounts 190,000
Amortized cost of accounts receivable, December 31, 2013 P1,810,000
3-16. (Maynilad Company)

Alternative 1
Carrying value (10 M + 1.2 M) 11,200,000
Present value of future cash inflows:
Principal due on 12/31/15 (9M x 0.7972) P7,174,800
Interest for 2 years
9M x 8% = 720,000; 720,000 x 1.6901 1,216,872 8,391,672
Impairment loss P2,808,328
Entry: Restructured Notes Receivable 8,391,672

Impairment Loss – Receivables 2,808,328
Interest Receivable 1,200,000
Alternative 2
Carrying value (10 M + 1.2 M) 11,200,000
2M + (8% x 10M) = 2,800,000 x 0.8929 2,500,120
2M + (8% x 8M) = 2,640,000 x 0.7972 2,104,608
2M + (8% x 6M) = 2,480,000 x 0.7118 1,765,264
2M + (8% x 4M) = 2,320,000 x 0.6355 1,474,360
2M + (8% x 2M) = 2,160,000 x 0.5674 1,225,584 9,069,936
Impairment loss 2,130,064

Impairment Loss – Receivables 2,130,064
Alternative 3
Carrying value 10,000,000
Principal due on 12/31/15
10M x 0.7972 7,972,000
Interest due on 12/31/14 and 12/31/15
10M x 9% = 900,000; 900,000 x 1.6901 1,521,090 9,493,090
Impairment loss 506,910
19

Impairment Loss – Receivables 506,910
Cash 1,200,000
Alternative 4
Carrying value 11,200,000
Principal due on 12/31/13
11.2M x 0.797193876 8,928,572
Interest due on 12/31/13 and 12/31/14
11.2M x 12% = 1,344,000;
1,344,000 x 1.6900510 2,271,428 11,200,000
Impairment loss -0-
No entry is required for the restructuring.
3-17. (Kate Company)

(a) Cash 750,000
Notes Payable – National Bank 750,000
(b) Current assets:

Trade and other receivables (including P900,000 of accounts
pledged as collateral for a loan with National Bank) P2,000,000
Current liabilities:
Notes Payable – National Bank P 750,000
Interest Payable 7,500
3-18. (Lexus Company)

Amount of the loan P650,000
Less service charge (2% x 800,000) 16,000
Net proceeds from the assignment of accounts receivable P634,000
Sept. 1 Accounts Receivable Assigned 800,000

Accounts Receivable 800,000
Cash 634,000
Finance Charges 16,000
Notes Payable – Pacific Bank 650,000
Sept 1-30 Cash 300,000

Accounts Receivable Assigned 300,000
Sept. 30 Notes Payable – Pacific Bank 300,000

Interest Expense (650,000 x 12% x 1/12) 6,500
Cash 306,500
Oct. 1-31 Allowance for Uncollectible Accounts 10,000

Cash 400,000
Oct. 31 Notes Payable – Pacific Bank 350,000

Interest Expense (350,000 x 12% x 1/12) 3,500
Cash 353,500
31 Accounts Receivable 100,000

20
3-19. Accord Company)
July 1 Accounts Receivable Assigned 4,000,000

Accounts Receivable 4,000,000
1 Cash 3,040,000
Notes Payable – Bank 3,200,000
5% x 3,200,000 = 160,000
21 Sales Returns and Allowances 150,000

31 Cash 2,450,000
Accounts Receivable Assigned 2,500,000
2% x 2,500,000 = 50,000
Aug. 1 Notes Payable – Bank 2,500,000

Interest Expense (3.2M x 0.12 x 1/12) 32,000
Cash 2,532,000
15 Allowance for Uncollectible Accounts 50,000

31 Cash 1,000,000
Sept. 1 Notes Payable – Bank 700,000

Interest Expense (700,000 x 0.12 x 1/12) 7,000
Cash 707,000
1 Accounts Receivable 300,000

3–20. (Fortune Company)
Oct. 1 Accounts Receivable Assigned 2,000,000

1 Cash 1,410,000
Notes Payable 1,500,000
31 Interest Expense (1.5M x 0.12 x 1/12) 15,000

Notes Payable 985,000
Nov. 30 Notes Payable 515,000

Cash 279,850
3-21. (Highlander Company)

a.
Sept. 1 Cash 684,000
Receivable from Factor 36,000
Loss from Factoring 80,000
800,000 x 10% =80,000 Loss;
720,000 x 5% = 36,000 withheld
21
Nov. 1 Cash 582,000

Notes Payable-Bank 600,000
3% x 600,000 = 18,000
b.
Dec. 31 Uncollectible Accounts Expense 10,400
(190,000 + 1,000,000) x 2% = 23,800 – 13,400
3-22. (Hiku Company)
(a) Selling price of Accounts Receivable 90% x P1,200,000= P1,080,000

Factor’s holdback (6% x 1,080,000) (64,800)
Cash received from factoring P1,015,200
(b) Accounts receivable assigned balance (500,000 – 350,000) P 150,000

Balance of notes payable to the bank
400,000 – (350,000 – 4,000) (54,000)
Equity on assigned accounts P 96,000
(c) Face value of note discounted P 50,000

Interest for the full term April 30 – August 28
(50,000 x 9% x 120/360) 1,500
Maturity value P 51,500
Discount (51,500 x 10% x 88/360) (1,259)
Proceeds P 50,241
3-23. ( Edsamail Company)
(a) Maturity value = 500,000 + (500,000 x .08) = 540,000

Proceeds = 540,000 – (540,000 x 0.10 x 5/12) = 517,500
(b) Interest Receivable 23,333

500,000 x 8% x 7/12
Cash 517,500
Loss on Sale of Notes Receivable 5,833
Interest Receivable 23,333
3-24. a. Proceeds 90,000 – (90,000 x 0.12 x 20/365) = P89,408
Cash 89,408
Liability on Discounted Notes 89,408
b. Maturity value 75,000 + (75,000 x 0.09 x 90/365) = P76,664

Proceeds 76,664 – (76,664 x 0.12 x 50/365) = P75,404
Cash 75,404
c. Maturity value 60,000 + (60,000 x 0.14 x 120/365) = P62,762

Proceeds 62,762 – (62,762 x 0.12 x 45/365) = P61,833
Cash 61,833
22
3-25. (Crosswind Corporation)
2013
Feb. 1 Notes Receivable 60,000
Apr. 1 Cash 59,985

60,000 + (60,000 x .10 x 9/12) = 64,500
64,500 – (64,500 x .12 x 7/12) = 59,985
Nov. 2 Liability on Discounted Notes 59,985

Interest revenue (60,000 x 0.10 x 9/12) 4,500
2 Accounts Receivable (64,500 + 1,500) 66,000

Cash 66,000
3-26. (Explorer Company)

(a)
Accounts receivable factored P2,000,000
Purchase price 85%
Purchase price of accounts receivable factored P 1,700,000
Less amount withheld (5% x 1,700,000) 85,000
Net cash received from the factored accounts P 1,615,000
(b)
Cash 1,615,000
Loss on Factoring 300,000
Sales Returns 30,000

Cash 55,000
3-27. (Nature Company)
(a)
1/1/12 Interest Revenue 2,800
(1) Accounts Receivable 2,800,000

Sales 2,800,000
(2) Cash 2,200,000

Accounts Receivable (2,218,000 – 180,000)* 2,038,000
Accounts Receivable Assigned * 180,000
(3) Notes Receivable 250,000

(4) Cash 216,000

23
(5) Cash 41,400


Interest expense 4,600
Interest revenue 6,000
(6) Accounts Receivable Assigned 300,000

Cash 222,000
Notes Payable 240,000
(7) Accounts Receivable 15,900

(8) Allowance for Uncollectible Accounts 12,000

(9) Notes Payable 180,000

Interest Expense 3,000
Cash 183,000
(10) Uncollectible Accounts Expense 20,000

20,000 – (12,000 – 12,000 )
(11) Interest Receivable 3,200

*See item (9)
(b) Trade and Other Receivables P1,014,100
Trade and Other Receivables include the following:

Notes Receivable P 95,000
Accounts Receivable – Unassigned 815,900
Accounts Receivable - Assigned 120,000
Allowance for Uncollectible Accounts (20,000)
Total P1,014,100
24
MULTIPLE CHOICE QUESTIONS
Theory
MC1 A MC11 C
MC2 B MC12 C
MC3 A MC13 A
MC4 A MC14 C
MC5 C MC15 A
MC6 A MC16 D
MC7 D MC17 A
MC8 A MC18 C
MC9 A
MC10 C
Problems
MC19 B 450,000 x 1.4 = 630,000; 630,000 – 585,000 = 45,000

MC20 D 105,000 x .90 = 94,500 (Invoice price/Gross)
94,500 x .98 = 92,610 (net price)
MC21 C 200,000 x .90 x .95 = 171,000 (Invoice price/Gross); 171,000 x .97 = 165,870 (Net)
MC22 B 1,300,000 + 5,400,000 + 25,000 – 4,750,000 – 125,000 = 1,850,000
MC23 A 360,000 ÷ 80% = 450,000; 450,000 + 80,000 – 430,000 = 100,000
MC24 D 75,000 + 45,000 = 120,000
MC25 D 3% x 1,000,000 = 30,000
MC26 C 30,000 + 8,000 = 38,000
MC27 D 270,000 – 250,000 = 20,000; 20,000 + 23,000 – 28,000 – 5,000 = 10,000
MC28 B 17,500 – 30,500 + 8,050 + 200,000 = 15,050
MC29 B 480,000 + 2,400,000 – 2,560,000 – 17,600 – 36,800* + 4,800 = 270,400
*1,411,200 ÷ .98 = 1,440,000 x 2% = 28,800
792,000 ÷ .99 = 800,000 x 1% = 8,000; 28,800 + 8,000 = 36,800
MC30 A 19,200 + 4,800 – 17,600 = 6,400; 5% x 270,400 = 13,520; 13,520 – 6,400 = 7,120
MC31 A (5% x 600,000) + (10% x 40,000) + 14,000 = 48,000
MC32 B 20,000 + 7,500 – 12,500 – 3,700 = 11,300
MC33 D 50,000 + (50,000 x 10%) = 55,000; 55,000 – (55,000 x .12 x 6/12) = 51,700
MC34 C 400,000 x .75 = 300,000; 300,000 x 10% = 30,000
MC35 C 300,000 + 30,000 = 330,000
MC36 C 1,940,000 x 13.4% x 1/12= 21,663
MC37 B 2,000,000 x 12% x 1/12 = 20,000 (Note: The difference between interest income of
P21,663 and interest receivable of 20,000 is debited to Discount on Notes Receivable).
MC38 A 902,500 – (11% x 2,800,000) = 594,500
MC39 C (308,000 x 6/12) + (242,605 x 6/12) = 275,303 (See complete amortization table below)*
MC40 B 500,000 + (500,000 x 8%) = 540,000; 540,000 – (540,000 x 10% x 8/12) = 504,000
MC41 B 1,250,000 - (2% x 1,250,000)} = 1,225,000; 1,225,000 + 695,000 = 1,920,000
MC42 D (500,000 + 2,200,000) x 3% = 81,000; 81,000 – 32,000 = 49,000
MC43 C 550,000 – [(500,000 x 0.8265) + (40,000 x 1.7355)] = 67,380
MC44 A 5,500,000 – [(4,000,000 X .83) + (320,000 X 1.74)] = 1,623,200
MC45 D (4,000,000 X .83) + (320,000 X 1.74) = 3,876,800
*
Date Annual payment Interest income Reduction in principal Balance
July 1, 2012 2,800,000
July 1, 2013 902,500 11% x 2,800,000=308,000 902,500-308,000=594,500 2,205,500
July 1, 2014 902,500 11% x 2,205,500=242,605 902,500-242,605=659,895 1,545,605
July 1, 2015 902,500 11% x 1,545,605=170,017 902,500-170,017=732,483 813,122
July 1, 2016 902,500 902,500-813,122=89,378 813,122 -0-
25

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CHAPTER 3 - RECEIVABLES

3-2. (Ginoo Company)

10 Accounts Receivable-Men’s World 50,000

26 Accounts Receivable-Teens’ Kingdom 40,000

31 Sales Discounts 800

10 Accounts Receivable-Men’s World 49,000

Dec. 26 Accounts Receivable-Teens’ Kingdom 39,200

31 Accounts Receivable-Men’s World 1,000

10 Accounts Receivable-Men’s World 50,000

Dec. 19 Cash 67,032

26 Accounts Receivable-Teens’ Kingdom 40,000

31 Allowance for Sales Discount 1,000

3-3. (Colleco Supermarket)

3-4. (Colayco Company)

31 Notes Receivable 12,000

Aug. 15 Cash 20,000

Nov. 1 Cash 19,200

Nov. 4 Accounts Receivable-P. Noval 12,300

5 Accounts Receivable-Credit Card 9,000

Nov. 9 Cash 8,550

Nov. 15 Accounts Receivable-Moret Co. 10,000

Dec. 13 Cash 15,600

3-5. (Format Company)

a. Carrying value of the note on January 1, 2013

b. Carrying value, January 1, 2013 P3,945,000

3-6. (Formatted Company)

a. Carrying value of the note on January 1, 2013 (P2 M x 2.2832) P4,566,400

Carrying value, December 31, 2013

b. Carrying value, January 1, 2013 P4,566,400

3-7. (HRV Company)

(b) January 1 – September 30, 2014 (260,000 x 9/12) P 270,000

(c) As of December 31, 2013 Current Non-current

3- 8. (Pinky Pop Company)

(a) Amortization Table

(b) Journal entries

3-9. Pinky Pip Company

or 2.5 M x 2.48685 P6,217,125

Dec. 31 Cash 3,550,000

3-10. (Word Company)

Required balance in allowance account:

3-11. (Edit Company)

Allowance for Uncollectible Accounts, beg P 6,000

3-12. (Toyota Products, Inc.)

a. Accounts receivable 4,800,000

c. Allowance for uncollectible accounts 20,000

d. Accounts receivable 5,000

e. Notes receivable 25,000

Notes payable-bank 150,000

g. Uncollectible Accounts Expense 65,000

h. Interest receivable 250

3-13. (Rav, Inc.)

Accounts Receivable, December 31, 2012 P 337,000

Allowance for Uncollectible Accounts, December 31, 2012 P 12,000

The computation may also be conveniently done through T-accounts, as follows:

Allowance for Uncollectible Accounts

3-14. (Revo Company)

Allowance for Uncollectible Accounts, January 1, 2013 P 34,000

Accounts Receivable, December 31, 2013 P654,000

3-15. (Adventure Company)

a. Required/Adjusted balance of Allowance for Uncollectible Accounts:

Accounts Receivable, December 31 P 2,000,000

Accounts Receivable, January 1 P 1,200,000

b. Adjusted Allowance for Uncollectible Accounts, end P190,000

c. Accounts Receivable P2,000,000

3-16. (Maynilad Company)

Entry: Restructured Notes Receivable 8,391,672